A marina berth can be a selling point for a community title scheme – if the body corporate is on the water, a marina berth is a great way to give lot owners direct access to the rivers and canals, and space to moor a boat (or jetski).
On the face of it, it is a relatively straightforward arrangement – the lot owner leases a marina berth and pays the body corporate a fee to use it. If a lot owner sells their lot, the marina berth can be transferred to the new owner (assuming the arrangement has been set up correctly and the new owner wants the marina berth).
However, behind the scenes there is a lot more to it. The most commen arrangement is that:
1. The Queensland Government leases the entire marina area to the body corporate – this is called a “Head Lease” and means that the marina is not common property, but a body corporate asset, and the body corporate needs to obtain the correct approvals both:
- internally (at its own general meeting); and
- with the relevant Government department by making an application.
The Head Lease will usually have conditions and requirements about how the body corporate must administer the marina. The Head Lease and its terms are recorded with the Titles Office.
2. Once the body corporate has entered into the Head Lease it would then “Sub Lease” individual marina berths to lot owners.
The Sub Leases need to be consistent with the conditions and requirements of the Head Lease and regulate how the owner must use their marina berth, any rent paid and the process for assigning a marina berth. The Sub Lease is also recorded with the Titles Office.
3. If an owner sells their lot, the Sub Lease is ordinarily assigned consistent with the conditions and requirements of the Head Lease and Sub Lease.
Assigning a Sub Lease typically requires body corporate consent, a deed of assignment to the buyer and registration of the transfer with the Titles Office. This is an additional process to the usual conveyance of the lot.
4. Any rent paid under the Sub Lease should be properly accounted for by the body corporate. There are a number of specific requirements the body corporate must comply with (as set out in the Body Corporate and Community Management Act 1997) about where and how these funds must be kept by the body corporate and how expenses are budgeted for.
If you have a marina berth it is important that the Head Lease, Sub Lease, any assignments and any rent paid are properly managed by both the owner and the body corporate.
Mahoneys regularly assists bodies corporate in:
- assessing the current marina berth structure and carrying out any necessary corrections so that it meets the requirements of the Head Lease;
- managing the assignment of marina berths on an ongoing basis; and
- advising on marina berth disputes and issues.
Please contact us if you have any marina berth questions or do not have a system in place to manage the assignment of marina berths.